On Panther, when you first implement FileVault, your home directory is copied into a sparse image file and then remounted in its old location under /Users. One of the side effects of this is that you can no longer access the personal web sharing pages (~/Sites) in that directory. This is because the sparse image is remounted with only the owner permissions set (700).
To re-enable the personal web site, drop down to the terminal and enter the following:
chmod 755 ~
After this, you should be able to access your personal web site again.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20031020155055182